Home loan loyalty rort costs borrowers billions

By Mozo Editorial · · 2 min read
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It’s a commonly held belief that it pays to be loyal, but when it comes to your home loan it seems loyalty actually has us paying more. Billions of dollars more, if new analysis by online lender Athena is correct.

Athena’s analysis of Reserve Bank data suggests that Australian mortgage holders have forked out an estimated $9 billion in loyalty penalties so far in 2021. According to Athena’s CEO Nathan Walsh, this is because new home loan customers get offered better rates than existing customers.

As large as that $9 billion figure is, it’s even more mind-blowing at the individual level. Athena’s numbers reveal that the loyalty penalty rort could see the typical borrower with a $400,000 loan pay an extra $37,462 in interest over the life of the loan - or $1,249 extra per year.

“Aussie homeowners feel that their lender is taking advantage of them and are fed up,” Walsh said. “The loyalty penalty rort costs customers billions of dollars a year. We think it’s time for this practice to stop, and homeowners agree.”

With home loan rates now starting below 2.00%, there's never been a better time to review your current rate against the market. Take a look at some of the latest rates available right now and get switching!

TOP HOME LOANS OCTOBER 2021 - last updated 9 December 2023

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* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

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